Home > Uncategorized > Economics, concepts, language and the progress of science

Economics, concepts, language and the progress of science

Update: thanks to Calgacus (comments), we have a link to the 1913 book by Pigou – which happens to be another book than the 1933 Theory of Unemployment book criticized by Keynes

After, say, 1700 an increasing share of the population became dependent on wage labour – an could, hence, become unemployed. Despite Über and the like this process still seems to continue. Economics as a science adapted – but this took time. A lot of time (and dare I say that neoclassical macro models still deny its existence…). Peter Rodenburg about this:

The word ‘unemployment’ is now widely used both in research and in everyday language. Although one might expect it to be an old term, it is in fact a fairly new one. In the Netherlands the term came into use in the last quarter of the nineteenth century. It is first mentioned in the Encyclopaedia Britannica in 1911, while the first theoretical work in economics explicitly devoted to the problem of ‘joblessness’ was (as far as we know) Pigou’s Unemployment in 1913. It may come as a surprise that even in the work of important nineteenth century writers like Marx, who studied and discussed the issue of joblessness extensively – the notion of involuntary unemployment is in fact one of the key concepts in his work – the term itself is absent.

Whereas Marx spoke of a “reserve army of labour”, “surplus population” or “redundant working population”, his contemporaries used terms like “want of employment” or “involuntary idleness” or, which was more often the case, “laziness” or “pauperism” through “want of work”, rather than “unemployment”. So, before unemployment could be quantifi ed at all, not only was a definition needed,
but the very idea of unemployment as a social phenomenon had to be conceived:
unemployment had to be ‘discovered’ before it could be measured systematically ….
It was not easy to conceive the idea of unemployment, which is illustrated by the fact that for many occupations, temporary idleness was considered an accepted part of the job. Therefore separating ‘unemployment’ or ‘underemployment’ from ‘inherent temporary idleness’ was extremely diffi cult, if not impossible. However, because of the serious social consequence of unemployment in the pre-welfare state era, there was an urgent need, most notably for city councils and charitable organisations, to chart unemployment and to develop poverty relief policies.

I cold not find a webversion of the Pigou book but here is a link to an article about it and the reason why Keynes thought its non-monetary analysis was crap (Hey, guys and galls, this is about wagelabour. People work for the money. And last time I checked, money was a monetary phenomenon. Just like prices.).

  1. October 24, 2015 at 5:18 pm

    here is Pigou’s book. There are somewhat older books on it, should have them somewhere.

    • merijnknibbe
      October 24, 2015 at 10:23 pm

      Thanks, post adapted!

  2. October 25, 2015 at 8:35 am

    I have Pigou’s 1913 book, and it is clearly not the partly-mathematical 1933 book referred to in the article referenced – but it is still crap. Peter Rodenburg’s interesting observations on the origins of the term “unemployment” got me thinking of what it means in terms of neo-lib economic theory. Does it not reduce to inability to sell one’s skills or labour at an economic rate of profit, given one’s levels of access to demand, technology and capital? I’m interested in the definition, so improvements on it would be welcome.

  3. October 26, 2015 at 10:25 am


    In order to get out of eternal wish-wash, the progress of science requires a consistent set of concepts.

    “The often heard rule that concepts are to be defined before they are used in a discussion is much too simple minded pre-Hilbertian. The only way to arrive at coherent languages is to set up axiomatic systems implicitly defining the basic concepts.” (Schmiechen)

    The use of the word unemployment is a pertinent example of incoherent thinking and talking, which is indeed second nature to the representative economist.

    • Paul Schächterle
      October 27, 2015 at 7:07 am

      “The use of the word unemployment is a pertinent example of incoherent thinking and talking, […]”

      I don’t know if I understand your point. What do you mean?

  4. October 27, 2015 at 10:45 am

    Answer to Paul Schächterle on ‘Economics, concepts, language and the progress of science’

    The most curious fact about economics is that is has not taken off the ground since Adam Smith “… we know little more now about ‘how the economy works,’ or about the modus operandi of the invisible hand than we knew in 1790, after Adam Smith completed the last revision of The Wealth of Nations.” (Clower, 1999, p. 401)

    Compare this to the contemporaneous evolution of physics, then economics has in fact fallen even further behind. What obscures this de facto regression is that economists have always taken in edge-of-science tools that have been developed elsewhere. Thus, over more than two centuries now, economists of all schools have been busily engaged in what genuine scientists like Feynman readily identified as cargo cult science (see Wikipedia).

    Thus, economics gave the impression of scientific progress while it has not moved one millimeter above the proto-scientific level of Adam Smith. Why? It is obvious, and Merijn Knibbe’s contribution is a pertinent reminder, that economists have never managed to come clear with the fundamental concepts of their trade.

    The term unemployment, however, represents only the miniscule tip of the methodological crap mountain that is advertized as queen of the social sciences. The ultimate reason for the observable self-paralysis of economics is that the representative economist cannot tell the difference between the fundamental concepts profit and income. It should be clear that without a proper understanding of the concept of profit economics is scientifically dead and what you can see still walking around is a zombie.

    Among genuine scientists all this has not gone unnoticed “Time and again in the twentieth century, prominent physicists have chastised their economist colleagues in no uncertain terms …” (Mirowski, 1995, p. 357)

    It did not help much. In everyday life, how do we characterize people who are unable to apply a coherent language?

    Egmont Kakarot-Handtke

    Clower, R. W. (1999). Post-Keynes Monetary and Financial Theory. Journal of Post
    Keynesian Economics, 21(3): 399–414. URL http://www.jstor.org/stable/4538639.
    Mirowski, P. (1995). More Heat than Light. Cambridge: Cambridge University Press.

  5. January 9, 2018 at 6:41 pm

    Here is a link to the right 1933 book by Pigou that was criticized by Keynes. Remember looking at the General Theory & thinking that I should take a look at that Pigou book – back in the 70s. Should get around to it one of these decades. :-)

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